Fraudulent Crypto Entities Shut Down by New Jersey Watchdog

A handful of online crypto trading entities, namely Bulk Investments, Forte Trade Limited, Dilna Investments Ltd. cheated New Jersey investors out of nearly $100,000.

Cease and desist orders were issued to a total of five fraudulent crypto investment companies by the New Jersey Bureau of Securities. This came as a response to the watchdog discovering that they used common investment scams to lure naive investors into their phony crypto funds. Some of the red flags included vague promises of profit, bogus client endorsements, limited and misleading disclosures, and failure to identify the company’s principles.

Sean Neafsay, Acting Director of the Division of Consumer Affairs, urged participants to more thoroughly research entities they want to invest with.

Companies behind crypto ads seen on Google must register with the Financial Crimes Enforcement Network (FinCEN). Loans and ICOs advertisements remain forbidden and all local and federal laws must be complied with.

At least three of the fraudulent entities defrauded New Jersey investors out of their funds. Bulk Investments received $74,900 worth of bitcoin for the purchase of securities, Forte Trade Limited received $3,300, while Dilna Investments Limited received $11,000 from a New Jersey investor. In each case, when the investor wished to withdraw funds, an additional payment was requested before the funds could supposedly be released.

The other two entities, RealBitCore Mining and FileFxOption allegedly showed false customer testimonial data on their websites. 

New Jersey regulators not wasting time with crypto scammers

This isn’t the first time that New Jersey authorities have been firm with cryptocurrency institutions transgressing state securities regulations. The New Jersey Bureau of Securities clamped down on Zoptax and Unocall in 2019 for offering unregistered securities to investors.

BlockFi recently landed itself in hot water with the New Jersey Attorney General’s office, receiving a cease and desist order on its interest-bearing accounts. It received a similar reception in Vermont, Texas, and Alabama. BlockFi CEO Zac Prince at the time maintained his position that the BlockFi Interest Account is not a security.

Ciphertrace reported that major crypto thefts, hacks, and frauds totaled $681 million this year as of July, though that number is likely closer to the $1 billion mark now. Governments are increasingly investing in analytics tools to combat crypto fraud. Three common software tools used to deanonymize blockchain transactions are being developed by CipherTrace, Elliptic, and Chainalysis.

It does help when victims come forward. An example occurred in India, where fraudsters made outrageous claims on potential returns if crypto was handed over, and an arrest was made following a complaint to the police.

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